At its launch the service, known as Windows Live Folders at the time (with a codename of SkyDrive), was provided as a limited beta available to a few testers in the United States.[3] On August 1, 2007, the service was expanded to a wider audience. Shortly thereafter, on August 9, 2007, the service was renamed Windows Live SkyDrive and made available to testers in the United Kingdom and India.[4] As of 22 May 2008[update] SkyDrive was initially available in 38 countries and regions.,[5] later expanded to 62.[6] On December 2, 2008, the capacity of an individual SkyDrive account was upgraded from 5 GB to 25 GB, and Microsoft added a separate entry point called Windows Live Photos which allowed users to access their photos and videos stored on SkyDrive. This entry point allowed users to add "People tags" to their photos, download photos into Windows Photo Gallery or as a ZIP file, as well as viewing Exif metadata such as camera information for the photos uploaded. Microsoft also added the ability to have full-screen slide shows for photos using Silverlight.

SkyDrive was updated to "Wave 4" release on June 7, 2010, and added the ability to work with Office Web Apps (now known as Office Online), with versioning. In this update, due to the discontinuation of Windows Live Toolbar, the ability to synchronise and share bookmarked web links between users via SkyDrive was also discontinued. However, users were still able to use Windows Live Mesh, which replaced the previous Windows Live Favorites, to synchronize their favorites between computers until its discontinuation in February 2013.[7]

In June 2010, users of Office Live Workspace, released in October 2007,[8] were migrated to Windows Live Office. The migration included all existing workspaces, documents, and sharing permissions.[9] The merger of the two services was a result of Microsoft's decision to merge its Office Live team into Windows Live in January 2009,[10] as well as several deficiencies with Office Live Workspace, which lacked high-fidelity document viewing and did not allow files to be edited from within the web browser.[11] Office Live Workspace also did not offer offline collaboration and co-authoring functionality – instead documents were "checked out" and "checked in", though the service did integrate with SharedView for real-time screen sharing.

On June 20, 2011, Microsoft overhauled the user interface for SkyDrive, built using HTML5 technologies. The updated version featured caching, hardware acceleration, HTML5 video, quick views, cleaner arrangement of photos and infinite scrolling. Microsoft also doubled the file size limit from 50 MB to 100 MB per file. With this update, Microsoft consolidated the different entry points for SkyDrive, such as Windows Live Photos and Windows Live Office, into one single interface. Files and folders shared with a user, including those in Windows Live Groups, were also accessible in the new interface.[12] On November 29, 2011, Microsoft updated SkyDrive to make sharing and file management easier, as well as HTML5 and other updates. This update also allowed users to see how much storage they had (and how much they had used), a feature that had been removed in the previous update as part of the redesign.[13]

On December 3, 2011, Microsoft released SkyDrive apps for iOS and Windows Phone, which are available in the App Store and Windows Phone Store respectively. On April 22, 2012, Microsoft released a SkyDrive desktop app for Windows Vista, 7 and 8, as well as macOS, allowing users to synchronize files on SkyDrive, much like Windows Live Mesh, and to "fetch" files on their computer via the web browser. In addition, SkyDrive also provided additional storage available for purchase and reduced the free storage space for new users to 7 GB (from 25 GB). Existing users were offered a free upgrade offer to retain their 25 GB of free storage. The updated SkyDrive also allowed files up to 2 GB in size (uploaded via the SkyDrive desktop app).[14] The update also brought additional features such as Open Document Format (ODF) capability, URL shortening services and direct sharing of files to Twitter.

On August 14, 2012, Microsoft announced a new update for SkyDrive which brought changes and improvements to SkyDrive.com, SkyDrive for Windows desktop and OS X, and the SkyDrive API as part of Live Connect. For SkyDrive.com, the updates brought a new "modern" design for the web service consistent with Outlook.com, and along with the UI update the service also received improvements such as instant search, contextual toolbar, multi-select in thumbnail view, drag-and-drop files into folders, and sorting improvements. For the SkyDrive for Windows desktop and macOS applications, the update brought new performance improvements to photo uploads and the sync experience. The update also improved the SkyDrive API with the removal of file type restrictions, ability to upload images in their full resolution, as well as a new SkyDrive file picker for opening and saving files.[15] On August 28, 2012, Microsoft released a SkyDrive app for Android on Google Play store.[16] On September 18, 2012, Microsoft also introduced a recycle bin feature on SkyDrive and announced that SkyDrive will allow users to create online surveys via Excel Web App.[17]

Microsoft became involved in a lawsuit with British television broadcaster BSkyB for using the word "Sky", resulting in a High Court ruling in June 2013 that the service's brand breached BSkyB's trademark.[18] On July 31, 2013, in a joint press release between BSkyB and Microsoft, it was announced that a settlement had been reached and as a result the SkyDrive name would be dropped. BSkyB allowed Microsoft to continue using the brand "for a reasonable period of time to allow for an orderly transition to a new brand".[19] "SkyDrive" was renamed "OneDrive" on most platforms on February 19, 2014, following an announcement on January 27.[20][21][22]

On June 18, 2015, Microsoft launched an improved design of OneDrive for the web.[23]

In 2015 Microsoft removed the unlimited storage plan for Office 365 Home, Personal and University packages, reduced the free OneDrive storage from 15 GB to 5 GB, and replaced paid subscriptions to 100 GB and 200 GB plans to a $1.99 per month 50 GB plan. These changes caused major controversy with users, some of whom petitioned Microsoft to reverse the plans. By November 21, 2015, in response to Microsoft's November 2 announcement, over 70,000 people had taken to the official OneDrive uservoice to voice their concerns.[24] According to Microsoft these changes were a response to people abusing the service by using OneDrive to store PC backups, movie collections, and DVR recordings.[25]

As of July 2018[update] the service offers 5 GB of free storage for new users.[2][26] Additional storage is available for purchase.[27]

The amount of storage available has changed several times. Initially, the service provided 7 GB of storage and, for one year, an additional 3 GB of free storage to students.[28] Users who signed up to OneDrive prior to April 22, 2012 were able to opt-in for a limited time offer of 25 GB of free storage upgrade. The service is built using HTML5 technologies,[12] and files up to 300 MB can be uploaded via drag and drop into the web browser,[29] or up to 10 GB via the OneDrive desktop application for Microsoft Windows and OS X.[30] From September 23, 2013 onwards, in addition to 7 GB of free storage (or 25 GB for users eligible for the free upgrade), power users who required more storage could choose from one of four paid storage plans.[31]

Users in some regions may need to have a certain payment card or PayPal account to pay.[32] The paid storage plan is renewed automatically each year unless Microsoft or the user cancels the service.[33]

Upon the re-launch as OneDrive, monthly payment plans were introduced, along with the ability to earn up to 5 GB of free storage for referring new users to OneDrive (500 MB each), and 3 GB if users enable automatic uploads of photos using the OneDrive mobile apps on smartphones.[22] Subscribers to Office 365's home-oriented plans also receive additional storage for use with the service, with 20 GB per user.[34]

In June 2014 it was announced that OneDrive's default storage would increase to 15 GB, putting it in line with its competitor Google Drive. An additional 15 GB were offered for activating camera roll backup on a mobile device, putting it ahead of Google Drive until November 2015, when this bonus was cancelled. The amount of additional storage for Office 365 subscribers also increased to 1 TB.[34] Microsoft reduced the price of OneDrive storage subscriptions at that time.

In October 2014 Microsoft announced that it would offer unlimited OneDrive storage to all Office 365 subscribers.[35] However, on November 3, 2015, the 1 TB cap was reinstated. Microsoft additionally announced the planned replacement of its 100 GB and 200 GB plans with a new 50 GB plan in early 2016, and the reduction of free storage from 15 GB to 5 GB. Any current accounts over this limit could keep the increased storage for at least 12 months.[36][26][37] Following calls for Microsoft to reverse the reduction decision, Microsoft announced on December 11 of the same year that it would allow existing users to request to have up to 30GB of free storage unaffected by the reduction, and said it would fully refund customers of Office 365 not satisfied with the 1TB cap, among other redress.[38]

OneDrive initially did not store previous versions of files, except for Microsoft Office formats.[39] In July 2017, however, Microsoft OneDrive team announced that version history support for all file types was the top requested feature; as such, OneDrive would keep older versions of all files for up to 30 days.[40]

OneDrive implements a "recycle bin"; files the user chooses to delete are stored there for a time, without counting as part of the user's allocation, and can be reinstated until they are ultimately purged from OneDrive.[17]

Entire folders can be downloaded as a single ZIP file with OneDrive. For a single download, there is a limit of 15 GB; the total ZIP file size limit is 20 GB; and up to 10,000 files can be included in a ZIP file.[41]

Microsoft added Office for the web (known at the time as Office Web Apps and later Office Online) capability to OneDrive in its "Wave 4" update, allowing users to upload, create, edit and share Word, Excel, PowerPoint and OneNote documents directly within a web browser. In addition, Office for the web allows multiple users to simultaneously co-author Excel documents in a web browser, and co-author OneNote documents with another web user or the desktop application. Users can also view the version history of Office documents stored on OneDrive.[42]

OneDrive can use geo-location data for photos uploaded to the service, and will automatically display a map of the tagged location. OneDrive also allows users to tag people in photos uploaded via the web interface or via Windows Photo Gallery.

Photos uploaded to OneDrive can be played as an automatic slideshow. Images uploaded to OneDrive will be recognized as 360° images if they are clicked with popular models of 360° cameras in a panoramic mode, right from within the OneDrive.

Microsoft has released OneDrive client applications for Android,[16]iOS,[53]Windows 8,[14][32]Windows 10, Windows 10 Mobile,[54]Windows Phone[53]Xbox 360,[55] and Xbox One[22] that allow users to browse, view and organize files stored on their OneDrive cloud storage. In addition, Microsoft also released desktop applications for Microsoft Windows (Vista and later) and OS X (10.7 Lion and later)[56] that allow users to synchronize their entire OneDrive storage with their computers for offline access, as well as between multiple computers.[57] The OneDrive client for Windows allows users to "fetch" the contents of their PCs via the web browser, provided the user enabled this option; macOS users can fetch from a PC, but not vice versa. The Android, iOS and Windows Phone 8 versions also allow camera photos to automatically be uploaded to OneDrive.[22] Upon the re-branding as OneDrive, the Xbox One app also added achievements.[58]

In addition to the client apps, OneDrive is integrated into Windows 8.1 and later, Microsoft Office 2010 and later, as well as the Office and Photos hub in Windows Phone, enabling users to access documents, photos and videos stored on their OneDrive account. OneDrive in Windows 8.1 can sync user settings and files, through either the included OneDrive app (originally called SkyDrive, until the name was changed with a Windows update[59]) or File Explorer, deprecating the previous Windows client. Along with the use of reparse points, these changes allow files to be accessed directly from OneDrive as if they are stored locally. The OneDrive app was also updated to include a local file manager. Unlike on Windows 8, use of OneDrive on Windows 8.1 requires the user's Windows account be linked to a Microsoft account; the previous OneDrive desktop client (which did not have this requirement) no longer works on Windows 8.1. Additionally, the Fetch feature does not work on Windows 8.1.[22][57][60][61]

In an update on July 4, 2017, OneDrive desktop client started showing an error message to the effect that the local OneDrive folder must be located on an NTFS volume only. Other file systems, including the older FAT32 and exFAT, as well as the newer ReFS were not supported. Microsoft further commented that this was always the requirement; it had merely fixed a bug in which the warning was not displayed. Microsoft also denied this feature having anything to do with the forthcoming OneDrive Files On-Demand.[62][63]

Microsoft OneNote users can sync one or more of their notebooks using OneDrive. Once a notebook is selected for sharing, OneDrive copies the notebook from the user's computer to OneDrive, and that online copy then becomes the original for all future changes. The originating copy remains on the user's hard drive but is no longer updated by OneNote. Users can switch back to an offline-only version of the notebook by manually changing its location in OneNote, but unpredictable results may occur, including the OneNote application crashing and loss of notebook data under certain conditions.[65] Under such circumstances, re-sharing the Notebook to OneDrive may result in recovery of the lost data.[66]

OneDrive allows users to embed their Word, Excel and PowerPoint documents into other web pages. These embedded documents allow anyone who visits these web pages to interact with them, such as browsing an embedded PowerPoint slideshow or perform calculations within an embedded Excel spreadsheet. In addition, Microsoft has released a set of APIs for OneDrive via Live Connect to enable developers to develop web services and client apps utilizing OneDrive's cloud storage.[67] This allows users of these web services and client apps to browse, view, upload or edit files stored on OneDrive. A software development kit (SDK) is available for .NET Framework, iOS, Android and Python with a limited set of API for web apps and Windows.[68]

OneDrive is already interoperable with a host of web services, including:

Directly upload Office documents and photos within Outlook.com, store them on OneDrive and share them with other users.[69]

Directly save Office documents within Outlook.com to OneDrive, and view or edit these documents directly within the web browser.[70]

Edit Office documents within the web browser using Office Online and reply directly back to the sender with the edits made.[70][71]

Facebook, Twitter and LinkedIn: Enables users to quickly share their files with their contacts on these social networks.[72] OneDrive maintains an access control list of all users with permissions to view or edit the files, including those users on social networks.[73]

Windows Live Groups: Before being discontinued, Windows Live Groups provided each group with 1 GB of storage space on OneDrive to be shared between the group members. Group members were allowed to access, create, modify and delete files within the group's OneDrive folders, along with the other functionality that OneDrive provides. However, these features eventually became native to OneDrive.

Data stored on OneDrive is subject to monitoring by Microsoft, and any content that is in violation of Microsoft's Code of Conduct is subject to removal and may lead to temporary or permanent shutdown of the account. This has led to privacy concerns in relation to data stored on OneDrive.[74] Microsoft has responded by indicating that "strict internal policies [are] in place to limit access to a user’s data", and that advanced mechanisms, such as Microsoft's automated PhotoDNA scanning tool, are utilized to ensure users abide with the Code of Conduct and that their account does not contain files in contravention thereof, such as partial human nudity (including art or drawings), or any online surveys.[75][76]

Microsoft has a similarly named but unrelated software plus service offering called OneDrive for Business (previously SkyDrive Pro[20][21]). While OneDrive is a personal storage service on the web, OneDrive for Business is a managed cloud storage for business users that replaces SharePoint Workspace. The physical medium on which the information is stored can be either hosted on-premises or purchased as service subscription from Microsoft.[77]